County may buy timber property in east Oregon

Hood River County could become a landlord in two eastern Oregon counties.

The county is seeking to increase its revenue base with the purchase of timber land in Umatilla and Grant counties.

At 6:30 p.m. on Monday the County Commission will present the proposed $6.6 million deal to the public for review and comment. The two properties are located in or around the Umatilla National Forest and comprise almost 19,000 acres.

Dave Meriwether, county administrator, said buying these tracts would allow the county to almost double the 1,000 acres it lost through an exchange with the U.S. Forest Service in 2001. Under that deal, the county was paid $7.6 million for the heavily regulated Scenic Area holdings that allowed only limited use.

However, officials received differing legal opinions at the state and federal levels about whether the money could be used for anything but the purchase of other resource lands. To avoid a potential court challenge, the county board decided to reinvest that capital back into timber property.

Ken Galloway, county forester, said the two forest parcels in eastern Oregon are a good long-term investment because they will yield between $250,000-$400,000 annually once the trees mature in about 15 years. Meanwhile, he said two stands of mixed larch, pine and fire are ready for cutting and will bring in $50,000-$75,000 every other year for up to six years. In addition, he said the county will net about $19,000 annually from grazing rights on some of the open land included with the purchase.

Galloway said these funds will be added to about $4 million of income earned each year from 28,000 acres of county land managed exclusively for harvest.

Following a directive from the county board, Galloway mailed out 22 letters to Hood River County timber owners last year asking if they were interested in selling their property. However, he received back only two replies, one from Mt. Hood Meadows, Ltd., and the other from Longview Fibre Company.

Then Galloway said Longview Fibre dropped out of the immediate running because it was not interested in selling any forest land, only undertaking an exchange that would ensure long-term timber management. Since Meadows agreed to accept payment for any value or acreage differential, Galloway said the county traded 640 acres in return for 786 acres, both parcels just south of Parkdale. That exchange included the payment of a little more than $1 million out of the Scenic Area account to offset the gain of about four million board feet of mature timber. The remaining $6.8 million, which included earned interest, was banked while Galloway scouted for new forest tracts in the Willamette Valley and even in the neighboring state of Washington.

The trade with Meadows, which was finalized on March 11, has since been legally challenged by the Hood River Valley Residents Committee and Mike McCarthy, one of its members. The two plaintiffs claim the best interests of citizens were not served by the deal because the estimated value of the properties failed to take into account Meadows’ intent to build a destination resort in the future.

The county has answered that argument by pointing out that no application for a resort is on the table and the law requires timber appraisals to be based on the “highest and best” existing use and not on speculation.

If the contested Meadows exchange is resolved in favor of the county and the proposed purchase in eastern Oregon is approved, Galloway expects the county to not only regain its average $110,000 annual revenue from the 1,000 acres but boost it significantly.

Meriwether said because Hood River’s strong timber program generates a significant income, the county ranks 29 out of 36 Oregon counties for property taxes.

“Our forest operations have always been a well-managed and profitable source of revenue so we wanted to continue doing what we know how to do best,” said Meriwether.

He and Galloway believe that harvest activities will be less regulated on the eastern Oregon properties because they lie outside of the Scenic Area or other environmentally sensitive zones. In addition, the two officials contend the parcels could be valuable as a bargaining tool to initiate trades with other landowners.

“This purchase would just open up a lot of options,” said Meriwether.

Galloway said the two tracts include the Wilkins Creek parcel of 5,480 acres in Umatilla County and the Desolation Creek parcel of 13,300 acres in Grant County.